Quanta Computer first-quarter profit rises 48 percent

Quanta Computer Inc (廣達電腦), the world's largest notebook computer maker, said first-quarter profit rose 4.8 percent from a year ago as Dell Inc placed bigger orders to meet demand from companies and consumers.

Net income at the company climbed to NT$3 billion (US$90 million) from NT$2.87 billion a year ago, it said in a statement to the Taiwan Stock Exchange. The company's profit margin, or the percentage of sales left after subtracting production costs, fell to 5.7 percent from 6.8 percent a year ago.

"The profit margins of Taiwan's contract manufacturers like Quanta are constantly squeezed by overseas buyers such as Dell and Hewlett-Packard Co who seek lower costs amid intense competition," said Phil Chen, a fund manager at Grand Cathay Securities Investment Trust Co (大華投信).

Sales, reported earlier, rose 18.8 percent in the first quarter to NT$65.7 billion as Quanta's biggest customer, Dell, increased orders. Round Rock, Texas-based Dell's personal computer shipments rose 28 percent in the first quarter, according to research firm IDC.

Dell earlier this month said its first-quarter sales will probably be US$11.4 billion, beating the company's earlier estimates, on better-than-expected demand from Europe and Asia.

Quanta Computer's move into making liquid-crystal display screens for Dell may improve profit, said investors such as Barro Liao, a fund manager at Prudential Securities Investment Trust Co (保誠投信).

Quanta Computer shares fell 6 percent to NT$70 in Taipei ahead of the earnings announcement.